After a decade of all time low rates, 2023 saw numerous bank base rate increases, a distinct loss of appetite for the buy-to-let market and house sales fall off a cliff. The press obviously enjoyed fuelling the fire with predictions of doom and despondency for homeowners.
Q4 saw a modicum of stabilisation and a slight return of house sales. With everyone wishing away 2023 and holding their breath for a positive 2024, January seemed to have answered all of our wishes. Brokers are inundated with work and firms are phoning anyone with a pulse and a CeMAP qualification to see if they are interested in joining.
Not a novel thing
How short our memories are.
January historically has a bounce. The housing market quietens before Christmas then receives a defibrillator like hit on Boxing Day, which means brokers returning to work at the start of January are inundated with enquiries.
February and March then quieten down and so normality begins.
What 2023 should have taught us is vanilla mortgages are exposed to bank interruptions. How many product transfers will you do before customers start realising that it’s easier to go direct? With unprecedented growth in automation and technology, vanilla mortgages could be a race to the bottom.
But all our learnings from 2023 are soon forgotten when, as now, business seems to return to normal and we can get on with life as it was.
Soon we could be at a junction where vanilla is a flavour the major banks keep for themselves and the broker world is forced to work in the grey areas where knowledge, diligence and service are the key.
Find your broker niche
Let’s learn from how exposed we were in 2023 and start focusing on areas where a broker’s specialist knowledge is rightly rewarded, the world of the niche product.
Even with rates dropping, Joe Public is going to remortgage to a far worse rate than for the past decade. This will obviously cause a rise in defaults so the sub-prime market could be a great choice.
The number of sole traders is on the increase with circa four million businesses having no employees and one million having less than 10 employees. That’s five million companies, making it one hell of a niche.
What other areas could be considered niche by the applicant but pretty run of the mill for a competent broker. Specialising means it’s easier to target your audience with bespoke messaging as well as attracting higher fees through perceived ‘expert’ status.
Specialising in niche areas doesn’t negate the possibility of completing vanilla mortgages. You’ll still have your existing client bank to work with but if you are seen as the company that can cope with the unusual it’ll be far easier to stand out.
Consider expanding your niche offering and become more resilient to market trends.
